While reviewing and electing your group medical and dental plan options for next year, please be sure to review and update (if needed) your group life insurance and 401(k) plan beneficiary designations. This is particularly important to do after experiencing a major life event such as a marriage, divorce, or other significant family change. Over the last year, more than one current spouse and/or child(ren) has been surprised to learn that their deceased loved one never updated his or her beneficiary designation(s). As a result, a former spouse or some other individual remained the actual named beneficiary. After being informed of the named beneficiary, the person who expected to be the beneficiary often argues that his or her loved one "would have wanted" or "intended" for him or her to receive the plan proceeds. However, because the plan sponsor must follow the last beneficiary designation form on file along with the plan terms, the "intended" argument is not supportable.

In short, beneficiary forms should be reviewed during every annual enrollment period regardless of a company's size. To the extent that benefit enrollment systems can be set up to flag certain life events and provide a beneficiary update reminder notice, plan sponsors can limit the awkward conversation that informs the new spouse or child(ren) that he or she is not the named beneficiary.